Apple Taps Sharp for iPad 3 Screen: Report

Apple
(NASDAQ:AAPL) is adding Japanese electronics manufacturer Sharp to the roster
of companies it uses to produce the popular iPad tablet, according to a report
in the Wall Street Journal.

The paper reported that Sharp will produce the LCD
screens for the next-generation version of the device as Apple seeks to
diversify the number of manufacturers it uses. The decision comes as Sharp
looks to broaden its LCD business and Apple fights a number of patent suits
with Samsung, which also supplies components for Apple's products.

"This
would allow Sharp to count on a more stable sales volume and would help its
technology gain more attention," Mizuho Investors Securities analyst Nobuo
Kurahashi told
the paper, though he noted it would be "a stretch" to posit Apple's
move came from the legal troubles stemming from patent suits with supplier
Samsung. Securities and investment banking group Jefferies said in a research
note that Sharp will provide panels for iPads, iPhones and iTVs.

"We
believe Apple has purchased $500M to $1B in equipment, Sharp and Apple have
modified the IGZO (indium, gallium, zinc) technology to make much-improved
displays, and Sharp and Apple may jointly produce OLED panels with a new
production technology that has led to significant yield improvements," the
company wrote. "The Sharp relationship will enable Apple to diversify away
from Samsung and gain additional display capacity with leading-edge technology.
Given Apple is fronting the capital spending, we also see these panels being
procured at good prices, which means better-than-expected margins."

As
alleged by Apple, Samsung has made its Galaxy phones and computer tablet work
and look like Apple's products through widespread patent and trade dress
infringement. Apple claims Samsung has even misappropriated Apple's distinctive
product packaging.

According
to IT research firm IDC, Samsung grabbed the No. 1 worldwide smartphone
position from Apple, selling more than 23 million units in the third quarter
for the first time ever, fueled by the phone maker's new Galaxy S II line and
handsets powered by its own bada platform. The company, which commanded 20
percent market share for Q3, sold over 10 million Google (NASDAQ:GOOG) Android-based
Galaxy S II handsets through April and October in a slow, country-by-country
rollout.